Fannie, Freddie CEOs earn millions

The two chief executives of Fannie Mae and Freddie Mac could get paid as much as $6 million for 2009, despite the companies' dismal performances this year, which cost taxpayers more than $100 billion.

Fannie CEO Michael Williams and Freddie CEO Charles "Ed" Haldeman Jr. each will receive $900,000 in salary, $3.1 million in deferred payments next year and an additional $2 million if they meet certain performance goals, according to filings with the Securities and Exchange Commission on Thursday.

The pay packages were approved by the Treasury Department and the Federal Housing Finance Agency, which regulates Fannie and Freddie.

That compares with $10.2 million former Fannie CEO Daniel Mudd received and $13.1 million former Freddie CEO Richard Syron pocketed in 2008. Both CEOs were ousted when federal regulators seized the companies in September 2008. In September, the federal government blocked exit packages for the pair worth as much as $24 million.

Since then, Fannie and Freddie have needed $111 billion in taxpayer money to stay afloat, one of the most expensive aftershocks of the financial crisis. News of the chief executives' pay could spark new criticism about the government's numerous bailouts.

Public anger over Wall Street pay boiled over this year. In response, the Obama administration imposed pay curbs on banks that received government bailouts. All the major banks have repaid their federal money, largely to escape caps on executive pay.

Former Bank of America Corp. CEO Ken Lewis, for example, agreed to forgo his salary and bonus this year under pressure from the government. Last year, he pocketed more than $9 million in total compensation. Bank of America received $45 billion in government assistance, which it has repaid.

Freddie Mac hired Haldeman, a former mutual fund executive, in July. At the time, the company disclosed his annual salary of $900,000 but not other incentives. In September, the company hired a new chief financial officer, Ross Kari, and said his pay package would be worth as much as $5.5 million.

Williams, formerly Fannie Mae's chief operating officer, took over as CEO in April after the first government-appointed CEO, Herbert Allison, took a job at the Treasury Department. Williams earned a base salary of $676,000 last year plus a retention award of $260,000.

Fannie Mae and Freddie Mac provide vital liquidity to the mortgage industry by purchasing home loans from lenders and selling them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion. That's about half of all mortgages.

Without government aid, the firms could have gone broke, leaving millions of people unable to get a mortgage. Most experts say the price for the bailouts will rise and complicate the government's exit strategy.

Though the Obama administration has yet to divulge its long-term plans for the firms, Fannie and Freddie are unlikely to return to their former influence.

Barclays Capital predicts the companies will need anywhere from $230 billion to $300 billion out of a potential $400 billion lifeline, which the Obama administration expanded from the original $200 billion.